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Unit 5 BM
Accounting
| Term | Definition |
|---|---|
| Assets= Liabilities + Capital | Accounting Equation |
| Money owed for credit purchases | Accounts Receivable |
| Things owned, such as cash and buildings | Assets |
| A financial statement that lists the assets, liabilities, and capital of a business | Balance Sheet |
| An institution that accepts demand deposits and makes commercial loans | Bank |
| A long-term written promise to pay a definite sum of money at a specific time | Bond |
| Provides payment of damages to people who have losses resulting from the negligence or dishonesty of an employee or from the failure of the business to complete a contract | Bonding |
| The value of a share of stock that is found by dividing the net worth (assets minus liabilities) of the corporation by the total numbers of shares outstanding | Book Value |
| A financial plan extending usually for one year | Budget |
| Earning power | Capacity |
| What a business is worth after subtracting liabilities from assets | Capital |
| A savings account that requires an investor to deposit a specified sum for fixed period at a fixed interest rate | Certificate of Deposit (CD) |
| an indication of one's moral obligation to pay debts | Character |
| A written order on a financial institution to pay previously deposited money to a third party on demand | Check |
| Property a borrower pledges to assure repayment of a loan | Collateral |
| A loan made to a business | Collateral Loan |
| Ownership that gives holders the right to participate in managing the business by having voting privileges and by sharing the profits (dividends) if there are any | Common Stock |
| Factors related to the economy and other matters, such as the economic health of an community or nation and the extent of business competition that affects credit decisions | Conditions |
| Allows business to electronically transfer employees' paychecks directly from the employer's bank account to employees' bank account | Direct Deposit |
| Offers payments to employees who are no longer able to work because of accidents or illnesses | Disability Insurance |
| Transferring money by computer rather than by check | Electronic Fund Transfer (EFT) |
| THe signature--usually on the back--that transfers a negotiable instrument | Endorsement |
| Money invested in the business by its owner or owners | Equity Capital |
| Reports that summarize financial data over a period of time | Financial Statement |
| Provides protection against the expenses of health care | Health Insurance |
| A financial document that reports total revenue and expenses for a specific period | Income Statement |
| The first time a company sells stock to the public | Initial Public Offering (IPO) |
| Credit used when a customer makes a sizable purchase and agrees to make payments over an extended period of time | Installment Credit |
| A risk management tool that limits financial loss from uncontrollable events in exchange for regular payments | Insurance |
| An organization that specializes in the sale of variety of stocks, bonds, and other securities | Investment Companies |
| Claims against assets or things owed; the debts of a business | Liabilities |
| Provides protection for risks involved in operating a business | Liability Insurance |
| Provides money that is paid upon the death of the insured person or people identified in the insurance policy | Life Insurance |
| A type of liability insurance that protects against financial loss arising from suits for negligence in providing professional services | Malpractice Insurance |
| The value at which stock is bought and sold on any given day | Market Value |
| Each insurance company is required to pay the losses of its insured when an accident occurs, regardless of who might have been responsible for the loss | No-fault Insurance |
| An institution that offers on demand deposits or commercial loans, but not both | Non-bank Financial Institution |
| Ownership that gives holders preference over the common stockholders when distributing dividends or assets | Preferred Stock |
| The lowest rate of interest; the rate at which large banks loan large sums to the best-qualified borrowers | Prime Rate |
| An unconditional written promise to pay a certian sum of money, at a particular time or on demand, to the order of one who has obtained the | Promissory note |
| THe uncertainty that a loss may occur | Risk |
| An account that allows customers to make deposits, earn interest, and make withdrawals at any time without financial penalties | Savings Account |
| A loan that requires the borrower to pledge something of value as security | Secured Loan |
| Stocks and Bonds | Securities |
| A credit and debit card with a memory that stores financial, health, credit and other kinds of data that can be read by computers | Smart Card |
| A share of ownership in corporation | Stock |
| A professional who buys and sells corporate securities for customers through a stock brokerage firm and gives investment advice | Stockbroker |
| A loan that is not backed by collateral | Unsecured Loan |
| An investor or investment group that lends large sums of money to promising, new, or expanding small companies | Ventrue Capitalist |
| The difference between current assets and current liabilities | Working Capital |
Created by:
Jimel35
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